Community Budgets face Whitehall barriers, Pickles admits

13 Sep 11
Local Government Secretary Eric Pickles has admitted that the government was 'a tad optimistic' to believe the Community Budgets initiative could be co-ordinated across Whitehall without a minister at the helm.

By Richard Johnstone | 13 September 2011

Local Government Secretary Eric Pickles has admitted that the government was ‘a tad optimistic’ to believe the Community Budgets initiative could be co-ordinated across Whitehall without a minister at the helm.

Eric Pickles

Pickles was put in charge of the flagship pooled funding scheme last month. ‘I think I am playing catch-up,’ he told the Commons communities and local government select committee yesterday.

Community Budgets involve merging funds from housing, the police, the NHS and council adults' and children's services into a single pot of money. Under the current trial, councils are given control of the money to tackle social problems around dysfunctional families. The aim is to turn round the lives of 120,000 families by the end of the Parliament.

The first 16 pilots in the scheme were launched in March, and 110 more will be in place by 2012/13. Pickles said that he expected to make an announcement ‘fairly soon’ on the next stage of the pilots

He told the committee that the initiative faces the problem of ‘the inability of one area of government to accept the opinion of another area’.

Asked who had been in charge of the project before he was given responsibility last week, Pickles said that it was the ‘secretary of state for good intentions’. He added that government had been ‘a tad optimistic’ that these plans could be co-ordinated across Whitehall without a sole minister in charge.

‘I think I am playing catch-up. In terms of ownership, we did need to have someone in charge of it. [But] I’m reasonably confident that we can start to roll these things out,’ Pickles told the MPs.

Plans for the greater rollout of the initiative are being considered by the second phase of the Local Government Resource Review.

In his session at the committee, Pickles was also questioned about the first part of the review, which in July produced plans to devolve business rate revenue to councils.

He told the committee that his preference was to create a system that avoided the need for frequent changes.

Under the government’s proposals, tariffs or top-ups will be put in place to ensure a fair starting point for all councils when the system kicks in in 2013/14. A levy will then apply to share any ‘disproportionate gain’ of rates, and the government will have a ‘reset’ option to adjust top-ups and tariffs to account for changes in local circumstances.

The consultation into the reform states that a longer period between resets, for example ten years, would create a greater incentive effect, while a shorter one would allow frequent reassessment of budgets.

Pickles told the committee that the level of the levy and the reset period are ‘the questions’ for the consultation on the plans.

He said that his view was to favour longer periods. ‘My instinct is to have to have a longer reset period to give councils more certainty and to deal with the long-term structural problems that exist in some areas.’

The pooling of rates between some authorities has been suggested, such as those in Local Enterprise Partnerships. Pickles said that he had ‘no objection’ to this, although the arrangement would have to be voluntary.

He also told the committee that once the current changes are in place, he couldn’t foresee any further changes to local government finance before the end of the current Parliament in 2015.

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